Rayner Rules Out Repaying Severance Payment After Returning to Cabinet

Angela Rayner has ruled out repaying a £16,876 ministerial severance payment after returning to the government as Housing Secretary.

Rayner resigned as deputy prime minister and housing secretary in September 2025 following controversy over the tax treatment of her purchase of an £800,000 property in Hove. Her departure from government resulted in a ministerial severance payment.

She was reappointed as housing secretary by new Prime Minister Andy Burnham on Monday, prompting Conservative politicians to call on her to return the money.

However, Rayner has rejected those demands, arguing that she was entitled to the payment when she left government and that she had spent almost a year outside ministerial office.

"My severance payment was given to me at the time. I had worked in government for a period of time and then I came out of government for just under a year."

She added that she was now returning to government to continue her work.

A renewed political row

Rayner's return to the Cabinet has reignited debate over ministerial severance payments.

Under the existing rules, ministers who leave office can receive a lump sum equivalent to 25% of their annual ministerial salary, subject to eligibility requirements.

Ministers who are aged over 65 or who are reappointed within three weeks of leaving office do not qualify for the payment.

The payment made to Rayner was recorded in the Ministry of Housing, Communities and Local Government's 2025/26 accounts.

The Conservatives have criticised Rayner's decision not to return the money.

The party argued that Rayner resigned from government, received a payment of around £17,000 and has now returned to the same Cabinet position.

The Conservatives questioned whether she should repay the money now that she has been reappointed.

The row has also highlighted previous comments made by Rayner about severance payments received by Conservative politicians.

In 2023, Rayner criticised what she described as a "staggering lack of shame" after it emerged that former ministers, including some who later returned to government, had received substantial severance payments.

Rayner has since argued that her criticism was made in the context of what she described as a "revolving door" in government, where ministers returned to office shortly after leaving.

Why did Rayner leave government?

Rayner's resignation in September 2025 followed an investigation into the tax arrangements surrounding her purchase of the Hove property.

The prime minister's independent ethics adviser, Sir Laurie Magnus, concluded that Rayner had breached the ministerial code.

However, he also said that she had acted with integrity.

The investigation found that Rayner had obtained legal advice when purchasing the property but had failed to seek additional specialist tax advice after being advised to do so.

Rayner subsequently resolved her tax affairs with HM Revenue and Customs following an investigation and paid approximately £40,000 in additional stamp duty.

The Ashton-under-Lyne MP has said she was "exonerated" of the allegation that she had deliberately attempted to avoid paying tax.

Speaking about the controversy, Rayner acknowledged that the experience had been difficult for both herself and her family.

She said she felt that she had let people down but remained determined to return to government and continue working on behalf of the public.

'Unfinished business' in government

Rayner has said she believes she has "unfinished business" in government, particularly in the areas of council housebuilding and support for local authorities.

Housing is expected to be a major priority for the new Burnham government.

The prime minister has promised to deliver what he describes as the biggest council housebuilding programme since the post-war period.

Rayner has been tasked with helping to deliver that ambition as housing secretary.

However, when asked to provide a specific target for the number of council homes the government intends to build, Rayner declined to give an exact figure or specify precisely which period she considers the "post-war period" to cover.

Instead, she said the government wanted to be as ambitious as possible and pointed to increased investment in social and affordable housing.

The government has committed £39bn in grant funding for social and affordable housing, which ministers say will support the delivery of new homes.

A political test for the new government

Rayner's return to Cabinet represents a significant political comeback for one of Labour's most prominent figures.

However, the controversy over her severance payment is likely to remain a political issue for both the government and the opposition.

The Conservatives argue that Rayner's refusal to return the money demonstrates a double standard, particularly given her previous criticism of former ministers who received severance payments before returning to government.

Labour supporters, meanwhile, argue that Rayner was entitled to the payment under the rules in place when she left office and that there is no requirement for her to return it simply because she has subsequently been reappointed.

The dispute raises broader questions about ministerial severance arrangements and whether the rules should be changed when former ministers return to government after a period away from office.

For Rayner, the immediate priority will be her new responsibilities as housing secretary and the government's ambitious plans to increase the supply of affordable and council housing.

For the opposition, her Cabinet comeback and the severance payment provide another opportunity to challenge the new prime minister's government.

As Andy Burnham begins his premiership, Angela Rayner's return to the Cabinet demonstrates that the new government is already facing difficult political questions—both over its policies and over the conduct of some of its most senior ministers.